Little Room to Play: How Changes to City Child-Care Policies Reduce Opportunities for Working Families

In addition, those working families that are not PA recipients but have managed to retain their subsidies are facing another hurdle: increasing fees. Until May 2009, co-pay levels for childcare subsidies in New York City were capped at 10% of a family’s income.(xv) ACS then executed a series of co-pay increases over a two-year period across all income brackets. By 2011 all families receiving child-care subsidies, particularly those with the lowest incomes and least able to absorb the costs, saw their fees rise drastically. Families at the poverty line or lower have been hardest hit by a co-pay that increased 400% (see Table 2). Even the top-tier co-pay for families increased by over 80%, to 17% of annual income.(xvi) These families that have managed to climb out of extreme poverty, yet still earn much less than the average New York City worker, are now seeing those gains erased by a huge jump in co-pays.(xvii) With 90% of families who receive child-care subsidies burdened by a 400% increase in fees, the poorest of the poor have been placed at great risk for financial and housing instability.

The current trend of declining subsidies is not likely to be reversed in the long term with the October 2012 implementation of EarlyLearn NYC (EarlyLearn), a universal, high-quality early care and education system for children up to five years in age.(xviii) EarlyLearn stands to improve the developmental content of care across the system; however, stricter educational guidelines, higher salaries, and a smaller student-teacher ratio come at a price that goes beyond higher operational costs. ACS projected that implementing the new standards, along with structural changes, would necessitate a reduction in capacity in City-funded centers by an additional 6,500 slots and cut funding for 4,300 vouchers in FY13.(xix) Lawmakers have delayed this eventuality by augmenting the FY13 budget with $150 million for child-care and afterschool programs beyond the mayor’s original proposal, ensuring that no child will lose access to child-care services this year.(xx) However, with no guarantee of a permanent increase in funding for EarlyLearn in place, providers could face budget shortfalls in future years that will strain the system and possibly lead to the reduction in capacity that was feared this year.

Children's Future in the Balance

Affordable child care is an essential work support for New York City’s low-income working families; however, ACS has limited access to these services and increased out-of-pocket costs for those not enrolled in PA. Families not receiving ACS subsidies are at risk of falling deeper into poverty when faced with the high cost of private child-care alternatives. Lack of child-care assistance may also force parents to leave the workforce in order to care for their children. These families will face the possibility of residential instability, which could eventually force them into homelessness.(xxi) In light of the barriers facing low-income working families, City policies need to strengthen and expand child-care capacity so all eligible families have access to the services they need to remain active in the workforce.

(xviii)The Federation of Protestant Welfare Agencies, EarlyLearn NYC Concept Paper (response submitted to New York City Administration for Children’s Services Commissioner Mattingly on May 21, 2010); New York City Administration for Children’s Services, EarlyLearn Request for Proposals, May 2011.